Russian Sanctions Bite

Vladimir Putin’s latest provocation – a 260-truck convoy of “humanitarian” aid to pro-Russian separatists holed up in eastern Ukraine – may be rumbling from border-post to Red Army military base, but his buccaneering has just hit a snag. On August 14, 2014, Rosneft – the petro-company without whose earnings Putin’s pockets are penniless – has just had to ask the Russian treasury for a $42 billion bailout. Why? Recent US and EU sanctions have effectively halted Western investment in the Russian oil sector. Putin minions who once sneered that Chinese investors would quickly take up any slack must now be biting their once-curled lips.

Over the long run, of course, Putin’s gang could be right – Chinese and Indian financing may yet be available. But even if Russia eventually does attract adequate Asian investment, the country’s most pressing long-term need may not be renminbi or rupees so much as technology – the sophisticated hardware, software and know-how needed to bring deepwater and Arctic Shelf deposits on-line in time to compensate for the aging of Russia’s inland fields in Western Siberia.